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Why Culture Is No Longer A Nice To Have When Driving Business Strategy

There are many reasons your business strategy may be stalled, but often the issue lies in a misalignment with your corporate culture. Through years of experience advising clients, it is clear to me that culture is the biggest obstacle leadership faces in executing business strategy. Your organization’s culture determines the values and habits that ultimately shape how strategy becomes a reality. If you do not have the right culture, your strategy will likely fall short. This is because, to be effective, organizations need employees to understand the company’s vision and carry it out. Even the most well thought out strategy can be derailed by not first considering corporate culture.

Often, leadership will attempt to address culture by changing performance incentives and other operational elements of their business. But cultural change has an emotional side that must be considered. To have any level of results in shifting your organization’s culture, you will need to have an understanding of how your employees are currently experiencing that culture. Deloitte has determined cultural indicators to help leadership better understand how your organization’s culture is being experienced by employees and impacting your business strategy. Armed with this understanding, leadership can make better decisions about changes needed to steer the organization in the desired direction.

Executive leadership realizes the importance of addressing this very issue. In Deloitte’s 2016 Human Capital Trends report released in March, nearly nine in ten (87 percent) of our survey respondents say that culture is important, and 54 percent rate it as very important, nine percentage points more than last year’s Human Capital Trends report.

There are powerful workforce elements at play requiring that companies consider their culture as they plan their strategies. According to Deloitte’s 2016 Millennial Survey, millennials will make up more than 40 percent of the workforce by the year 2020. This group demands a greater sense of purpose in their work and values experience over career path when choosing employment. Also, there is an uptick in mergers and acquisitions that is projected to continue through 2016. Organizations experiencing a merger require dramatic transformation.

Typically, an organization will consider operational elements when assessing current status and planning change. Leadership will evaluate:

Collective focus: the extent to which an organization emphasizes collaboration and teaming over individual initiative

Risk and governance: the extent to which compliance and structure shape people’s behavior

External orientation: the extent to which employees attend to customers (whether internal or external) or to the outside environment

Change and innovation: the extent to which employees embrace ambiguity and pursue new opportunities, as opposed to sticking with what they know

While these are all important elements, they only paint half the picture. Your organization’s culture is not just determined by how it operates. It is the manifestation of how employees experience life at work. To this end, assessments should also evaluate emotional elements that determine values and behaviors.

To truly engage employees and drive your organization’s culture in the desired direction, it is important to implement a business-led approach that emphasizes emotional connections with employees to prompt the behavioral changes that will lead to a new cultural mode of operation. After all, it is typically emotion, not logic or reason, that inspires loyalty and commitment.

With this understanding, Deloitte has identified four new assessment metrics to analyze how people experience their organization. These include:

Courage: How readily do people challenge the status quo when necessary, and persevere in adversity?

Inclusivity: How comfortable are people in working with diverse colleagues and ideas?

Commitment: How willing are people to support a larger plan even if it makes their own lives more difficult?

Shared beliefs: How easily do people join in a common understanding of company-specific challenges and opportunities?

These new indices can provide leadership with a better understanding of how employees actually “feel” about their organization. Generally speaking, the farther along a company is on these measures, the easier it will be to rally employees in a new direction, and the more likely your business strategy will be effective. Additionally, this more holistic approach to understating your corporate culture can help differentiate your company in the marketplace. This proactive, high-level management of culture can have significant returns, impacting everything from employee retention to your company’s bottom line.

The big takeaway here? Culture should not be an afterthought. It is not secondary to other operational considerations. In fact, it is a driver behind most successful business outcomes. Deloitte’s publication, Take your corporate culture off cruise control: Power up the emotive engine in your workplace, takes a deeper look at why and how organizations foster a sense of purpose in their employees and strengthen their emotional stake in the company’s success. To effectively implement business strategy, your company should make emotional connections that will motivate employees, support your organization’s vision, and deliver on your mission.

About the Author:

Alyson Daichendt is a director in Deloitte’s Human Capital practice and leads the Culture and Engagement offerings, including CulturePath, Deloitte’s culture change solution and framework.

One thought on “Why Culture Is No Longer A Nice To Have When Driving Business Strategy”

The report was marvellous. A lot of this is already registered in our head and we decide to uphold cultural values before setting feet in the office for a day at work, but, once we see others dwindling at the culture front, we take a backseat. Collective self correction is the only way to uphold culture.